The "Farmers Insurance News-Alert" website is dedicated to providing the consumer and general public with detailed information concerning the Farmers Insurance Group. This includes fraud reports, consumer complaints, lawsuit's and other legal actions taken against this company. All information contained herein is for educational purposes only. Original sources, when known are sited.
Sent: Friday, February 26, 1999 5:12 PM
Subject: Farmers Direct
So sorry to hear of your experience. I am a Farmers Agent here in Northern Virginia and I would like to shed some light on your experience and what has transpired since then.
In June 1993, Farmers Insurance Group of Companies (FIG) expanded into VA. VA became the 29th state in which FIG does business. FIG had expanded a few years earlier into TN and AL. In these 29 states, FIG is available only through our Agency Force. We are all exclusive agents of FIG, yet we are all independent contractors.
Expanding into these states was a very costly endeavor for FIG and they experienced some tremendous losses, to the degree that they vowed to expand differently in the future. Thus, Farmers Direct (FD) was born.
The thought behind FD was to expand into a state initially without the Agency Force, which would help reduce the initial cost. FD would offer competitive rates to preferred drivers only (people with blemished records need not apply). Once a certain amount of policies were in force, they would then send in the Agency Force and begin to offer other lines such as home and life.
So, they moved into MD and PA in, I think, late 1997/early 1998 as a pilot program. Since my Agency is close to the MD border, I was able to monitor what was going on a little bit. I would sporadically field calls from people wanting a quote or wanting to make arrangements for payment.
It was frustrating to have to explain to them that I did not represent FD and that there was nothing I could do for them.
From reviewing your experience, it would appear most of your problems can be correlated with the fact that FD was new and you were dealing with inexperienced staff (they were probably all in training at that time). However, your biggest problem came probably unbeknownst to you when FIG merged with Zurich Ins. in early 1998. While the merger was not complete until later in 1998, the plug was almost immediately pulled on FD (the merger allowed FIG to offer its products through the existing Zurich Agency Force, so FD was no longer needed). It would appear at this point you were simply getting lip service from staff members regarding correcting your original effective dates.
In all probability, they did not have the means to fix it. Obviously, they did not have the courage, or perhaps, the authority to tell you that FD no longer existed. I don't know for sure, but from what I can gather, FIG simply gave the existing policies to a competitor, which would explain why you could not get the changes made and why they apparently lost your complaint record. The Company that inherited these policies probably realized that any policyholders with problems would eventually leave in anger while the ones that were running smoothly could be cultivated into good accounts.
So, my opinion is you were a victim not so much of FIG/FD, but of "Big Business in Corporate America". You have already gotten good advice from my brethren to stay with your current agent, where you will be known by name, not your account #. I simply hope that other people who read this site will understand that, while FD was handled poorly, it should not reflect poorly on the Agency Force. We had nothing to do with it and we are very glad it is gone. These days, the only thing that separates one insurance company from another is it's customer service.
My advice to those reading this: STOP "SHOPPING FOR THE BEST PRICE". If you bought a policy from B because they are cheaper than A, then I can promise you that B will eventually have a rate increase. In the meantime, it is quite possible that A will have a rate reduction. Almost all companies have a tiering system based on ages and driving records.
Most policies that I review reveal that the rates are high because the policyholder is in the wrong tier, not because that companies' rates are higher. This is the fault of the agent. So, instead of shopping companies, SHOP FOR AN AGENT. Find the one who will look out for your best interests regarding tiers and, most importantly, your coverage.
Find one who can offer all lines of coverage so you only have to deal with one. After all, as Americans we typically like to deal with 1 doctor, 1 lawyer, 1 stock-broker, etc.
If you place most of your policies with one agent, I guarantee you will be treated as a client, not as an account#. However, if you venture into these 800#'s, providers via internet, etc., then you will be treated like a #.
Good luck to you, Ralph, and anyone else reading this.
XXXX XXXX, Agent
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